Tesco share price: Grocer files defence case against investors

on Jan 24, 2017
Updated: Oct 21, 2019

Tesco (LON:TSCO) has mounted a robust defence against investors suing the company over the accounting scandal in 2014, The Times has reported. Shareholders claim that they have suffered millions of pounds of losses following the discovery of an accounting black hole which was eventually valued at £263 million.

Tesco’s share price has slipped marginally lower in London in morning trade, having shed 0.21 percent to 194.60p as of 10:11 GMT. The stock is underperforming the broader market, with the benchmark FTSE 100 index having gained ground and currently standing 0.26 percent higher at 7,170.04 points. The grocer’s shares have gained more than 21 percent over the past year, but are down by just under six percent so far in 2017.

The Times reported this morning that Tesco had filed a 42-page defence in the High Court alleging that the 111 institutional investors suing the company had made ‘vague and amorphous’ claims which cannot be substantiated. The shareholders claim that they have suffered losses of millions of pounds following the retailer’s accounting scandal.
The blue-chip grocer meanwhile argues that the claimants have failed to prove that any senior executives, including Philip Clarke, its former chief executive, and Lawrie McIlwee, the former chief financial officer, had any knowledge of or were ‘wilfully blind’ to the retailer allegedly “deliberately communicating false and misleading statements to the market”.

The news comes after reports recently suggested that former boss Philip Clarke will not face charges from the Serious Fraud Office (SFO) over the accounting scandal. The SFO, however, has charged three other former Tesco executives, all of whom have pleaded not guilty.
In analyst ratings, Shore Capital reiterated its ‘hold’ stance on the blue-chip supermarket yesterday, without specifying a valuation on the shares. According to MarketBeat, Tesco currently has a consensus ‘hold’ rating and an average price target of 201p.
As of 10:45 GMT, Tuesday, 24 January, Tesco PLC share price is 194.00p.

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